Trump softens stance on tariffs and fed chair amid grim economic forecast

President Donald Trump is dialing back two of his most controversial economic positions, but a new report from the IMF suggests the damage may already be done.

(CNN)- President Donald Trump is dialing back two of his most controversial economic positions, but a new report from the International Monetary Fund (IMF) suggests the damage may already be done. White House Press Secretary Karoline Leavitt says the administration is “setting the stage for a deal with China,” signaling a possible shift in trade policy. Trump himself hinted that the steep tariffs on Chinese imports — currently at 145 percent following multiple hikes — could soon be reduced.

“I’m not going to say I’m going to play hardball with China. I’m going to play hardball with you, President Xi. No, no, we’re going to be very nice,” Trump said, reflecting a notable change in tone. The president also walked back a recent social media post calling for the swift termination of Federal Reserve Chair Jerome Powell. “I have no intention of firing him,” Trump stated. “I would like to see him be a little more active in terms of his idea to lower interest rates.”

These comments come in the wake of a sobering IMF report predicting a 0.5 percent year-over-year global economic slowdown, with an even steeper decline expected for the U.S. economy. The IMF cited Trump’s April 2 trade announcements—including a proposed 10 percent universal tariff, reciprocal duties currently on a 90-day pause, and the tariff hikes on Chinese goods—as reasons for the revised forecast.

Richard Quest, host of Quest Means Business, weighed in: “Everybody is saying that the U.S. economy is in trouble, but the administration continues to say it’s just a bit of transient, or a few transient problems. It’s more than that, and the evidence is there.”